Daniel Kawczynski (Con, Shrewsbury and Atcham) said that police officers entered his Commons office without a search warrant demanding to see constituency correspondence.

He told MPs: "To my great embarrassment and eternal shame, I was so weak I handed over the letter they demanded from my constituent."

Kawczynski told Sir Michael Lord, the deputy speaker: "After everything that has happened to Damian Green, I find it disgraceful that this is happening and I urge you to investigate."

Lord said he understood that the "great concern" about the incident but had "no knowledge of this matter".

He told Kawczynski: "If it is as you say it is, then it is obviously extremely serious."

In reply to Sir Patrick Cormack (Con, Staffordshire South), Lord said he would refer the matter immediately to the Speaker, Michael Martin.

Unemployment

David Cameron seized on the unemployment rise as evidence that the government's efforts to tackle the financial crisis were failing.

The Tory leader told Gordon Brown that the British economy faced "dark days" and there was "no real confidence that government policies are working".

The prime minister insisted that every job lost was a "matter of regret and sadness for us all". He promised to do everything in the government's power to help people back into work.

Cameron said that the value of bank shares bought by the taxpayer in last year's bail-out had plunged by more than £20bn. But Brown accused the Conservative leader of being "out of step with the rest of the world and out of your depth".

Obama

Cameron joined the prime minister in sending good wishes to the new US president, Barack Obama. To cheers, Brown said: "The whole house and the British people will wish to join the government in sending their best wishes to President Obama at the start of his presidency. I can assure the whole house we will maintain and strengthen our special relationship between our two countries."

The Tory leader said: "I agree that the whole house will be united in sending our best wishes to President Obama, who starts work with the goodwill of people right across the world."

MPs' expenses

The prime minister signalled that the government would not press ahead with proposals to exempt MPs from key parts of the Freedom of Information Act. He promised a free vote on changes to the expenses system. But he said that the FoI changes needed cross-party support and he would continue to consult on the issue.

Israel

Finding a lasting peace settlement between Palestinians and Israelis is the best hope of neutralising Iran's influence in the region, Brown said.

He acknowledged that a deal seemed a "distant prospect" after the recent Israeli offensive in Gaza, but the international community had a "duty" to push the process forward.

Brown urged Israel to complete its withdrawal of troops from Gaza as soon as possible.

Council tax

There can be "no excuse" for excessive council tax hikes, the local government minister, John Healey, said as he confirmed a 4.2% increase in town hall funding. He insisted that there were no "exceptional circumstances" to prevent sticking to a three-year funding deal and warned councils that tax increases for 2009-10 should be "substantially" below 5%.

Healey threatened to cap those imposing higher levels.

Sellafield

Ministers will be asked to explain why MPs were not given the chance to object to terms and conditions granted to the new company running Sellafield nuclear site.

Nuclear Management Partners was granted a £22bn contract but insisted on being fully indemnified against costs of cleaning up future accidents.

Paul Flynn (Lab, Newport West) said that documents obtained under the FoI Act showed ministers deliberately used the summer recess to push through the indemnity.

Martin said that he expected ministers to provide "accurate information" to the house.

He added: "You also raised the matter of how the contingent liability in relation to Sellafield was handled. I will ensure that you receive a response on that issue as soon as possible."

Omagh

The Northern Ireland secretary, Shaun Woodward, raised the work of Sir Peter Gibson, the intelligence services commissioner, whose report investigated allegations that vital intelligence about the Omagh bomb was held back.

Gibson said that any information on the bombers taken from telephone intercepts monitored by the government's listening station, GCHQ, was passed to police but could not have prevented the atrocity.

Woodward said: "I commend Sir Peter Gibson for the thorough and exhaustive way he has approached the task in looking at lessons to be learnt in the sharing of intercept material on the day and around the time of the Omagh bombing."

Bloody Sunday

The Northern Ireland secretary said that the Bloody Sunday inquiry's Northern Ireland office would be closed to save costs.

He told MPs: "I am concerned about the costs and, as a result of that, I have arranged for the office in Northern Ireland to be closed, the size and costs of the accommodation to be significantly reduced in London, for the IT contracts to be renegotiated, and, as a result of this, we will make savings of around 20% of what would have been spent in the remaining months."

Decommissioning

Woodward said he was likely to be able to announce soon further progress on decommissioning in Northern Ireland.

"I hope to report to the house in the near future on that progress."

He was responding after criticism over plans to extend by a year the deadline for loyalist paramilitaries to decommission weapons.

Savers

Savers are the "innocent victims" of the recession, Philip Hammond, the shadow chief secretary to the Treasury, said as he urged the government to help boost their investment income.

He said that savers had lost £22bn of annual interest income due to recent rate cuts and called on ministers to abolish the starting rate and basic rate of tax on savings to help raise returns.

Stephen Timms, the financial secretary to the Treasury, said that Tory proposals left a "large hole of several billion pounds" in public finances and would require "savage, swingeing cuts" in spending.

NHS

The government is pushing ahead with plans for NHS Urgent Care Centres despite warnings that they are clinically unproven, Andrew Lansley protested. The shadow health secretary said that they were no substitute for a properly funded emergency care system and added that ministers' claims that improvements to primary care would cut the number of patients going to A&E had been proved "false and dangerous".

Alan Johnson, the health secretary, said that all changes to emergency care were designed to improve care for patients. The reorganisation was governed by rules set out by junior minister Lord Darzi of Denham in his NHS review – one of which was that it must be "clinically driven".